Resource Integration Management Practices of Air New Zealand

OPERATION MANAGEMENT

Table of Contents
Table of Contents..........................................................................................................................2
1. INTRODUCTION.......................................................................................................................1
2. MAIN BODY...............................................................................................................................1
a. Resource integration management practices of Air New Zealand.........................................1
b. Critical evaluation of resource integration management practices of Air New Zealand.........2
c. The general adoption of resource integration and management theory................................3
D. Critical analysis of the factors which affects planning, policy development and resource
integration..................................................................................................................................4
E. Identifying and critically analyzing the impact of strategic responses...................................7
F. Managing the strategic and systematic integration of resources...........................................8
Developing a practical process to improve resource integration practices..........................10
g. Critical evolution of operational and financial risk faced by Air New Zealand and its
management approaches........................................................................................................11
h. Cost benefits analysis..........................................................................................................13
3. CONCLUSION.........................................................................................................................16
4. REFERENCES........................................................................................................................17

List of tables
Table 1: VRIO model.....................................................................................................................6
Table 2: Risk management of Air New Zealand..........................................................................12
Table 3: Strategic response.........................................................................................................14
Table 4: Strategic response.........................................................................................................14
Table 5: Price of new aircrafts.....................................................................................................14
List of Figures
Figure 1: New Zealand Industry analysis......................................................................................5
Figure 2: Kaizen model for continuous improvements and reduce the waste...............................9
Figure 3: Total Quality Management...........................................................................................11

1. INTRODUCTION
The operation management is the business function which consists of planning,
organizing, controlling and coordinating the organizational resources and is significant to
manage the routine operation with high productivity (Barratt, Choi & Li, 2011). However, the
poor focus on the operation management influence the decision making to a great extent which
increase the chance of business loss (Brown & Bessant, 2013). By considering the importance
of operational management, the present report has been formed by selecting the case of Air
New Zealand which offers air traveling services to the customer. In this context, the present
report aims to analyze the operation management of Air New Zealand to ensure the future
growth with the analysis of the current operation. This has huge scope to ensure to consistent
growth of the business in the national as well as international market. However, the findings of
the report are based on the single case study which might not be applied on different business
cases. In this regard, the resources integration management practices of the firm have been
identified and critically evaluated with the help of different academic theories. Further, the effect
of the firm's strategic concept on resource integration, planning, policy development and its
implementation have also been critically evaluated. Further, the impact of the firm's strategic
response on operational objectives have also been analyzed. Apart from this, the risk faced by
Air New Zealand has been critically evaluated by analyzing the risk management approaches
taken by the firm. Moreover, the cost benefits analysis has been done to justify the operation
management strategy of the firm.
2. MAIN BODY
a. Resource integration management practices of Air New Zealand
According to Kleinaltenkamp et al. (2012), the integration of the resource is crucial for
the firm to gain the sustainable competitive advantages by effectively utilizing each resource of
the firm and creates the value for the firm. In this context, in the case study of Air New Zealand,
several resource integration practices have been found. For instance, the Air New Zealand has
resource integration practice to deliver the quality of services to the consumer by introducing an
innovative way to render the services. By using the intellectual capacity, the Air New Zealand
enhances customer convenience when they are waiting in long check-in queues. However,
some issues by operational disruptions create a barrier for the firm to render the standard
quality services to the customer. For this purpose, the firm targets to increase the consumers'
positive experience by integrating its resources. For example, Air New Zealand will be leasing
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three big passenger aircraft and will change its ordinary schedule to provide continuous air
traveling services to the customer. It helps the firm to decrease the number of flights between
two particular destinations by enhancing the number of passengers in a single airplane which is
significant to reduce the environmental impact as well. It also provides enough time to the firm
for working on the maintenance of the global Rolls-Royce engine. It shows that the firm has
effective resource integration management practices by ensuring the continuity in the customer
services with the scheduled maintenance of Aircraft.
Besides managing the technical issue, the firm invests its financial resources in fulfilling
the demand of expected growth of airline customers through receiving the delivery of ten Airbus
A320 and seven Airbus A 321 NEO. For this purpose, to manage its financial resources, the
firm operates these airplanes on those routes which provide the cost benefits and select those
models of Aircraft which are efficient for fuel saving. Apart from this, Air New Zealand invests in
the development of customer contact center for improving the customers' inflight experience to
deliver effective services. Further, the firm targets to purchase the new environment-friendly
Aircraft to reduce the harmful carbon emission from the extensive air traveling activities. It
shows that the firm integrates its financial resources to deliver the air traveling services to
customers in an eco-friendly manner but highly dependent on the financial resources.
b. Critical evaluation of resource integration management practices of Air New Zealand
On the basis of identification of contemporary resources integration, it has been found
that Air New Zealand is transforming its resources integration processes in order to be first
choice of the consumers which does not even leave one single chance them to switch to
another brand. For this purpose, company carried out the market analysis and found the comfort
of customers is the foremost aspect to increase the competitiveness of the business. Owing to
this, it has planned to remove the queue by using the axiom of "no queues" as a driving force.
However, all airlines use the traditional method wherein customers have to stand in the queue
for check-in which is quite distressing. It is because they have to carry their luggage by standing
in the zigzag queue. By considering the customers on priority, Air New Zealand planned one
more process improvement related to baggage handling process. In this context, several studies
have shown that product or service differentiation is one of the most important key which help
company to stay competitive in the marketplace. It persuade buyers to pay even the higher
charges since they get convenient options which leads to increase their loyalty towards the
brand (Chete, Adeoti, Adeyinka & Ogundele, 2014; Chenet, Dagger & O'Sullivan, 2010;
Gebauer, Gustafsson & Witell, 2011). However, Saleem and Raja (2014) argued that innovation
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and differentiation are costly affair which demand resource capability of the business to be
proactive for bringing the changes in the industry. Therefore, the current resource integration
process of the business strives on the fast delivery of the services wherein business focuses on
the customer satisfaction by offering them convenient services.
According to Chu and Smyrnios (2018) argued that strategic resource integration by
configuration theory helps the company to assign the right resources to fulfill the right purpose
at the right time for achieving the desired outcome. In this context, the Air New Zealand also
realized that it is unable to meet standards because of operational disruptions. In this context,
Bekaert, Hoerova & Duca (2013) stated that operational disruption affect the customer
satisfaction and force them to switch to another brand. In response, the business is planning to
lease more aircraft which help in resolving the existing issues. Furthermore, the regional
expansion is being done through which number of customer will be increased. For instance,
bulk purchasing increases the chances of receiving defected products. It can create the
contingency of substantial financial loss because of the price of one aircraft in billions of Dollars
which can bring the firm near the stage of the insolvent. Not only is this but the company is
going to receive those aircrafts in coming three, four or five years which may increase the
opportunity cost to a great extent. However, Ringle, Sarstedt and Zimmermann (2011) asserted
that balanced expansion is crucial which provide the financial stability and allow business to
handle the current operation. Therefore, it is important for business to also focus on the current
business market by considering its resources capability to ensure the consistent operation.
c. The general adoption of resource integration and management theory
The trade-off situation of the business reflects that scenario which involves losing one
quantity or quality in return for gain in other term for the purpose of adding value to the products
and services (Löfsten, 2014). As per the case study, excellent services quality in term of fast
delivery and offering the services during the pick time by considering the potential requirement
of the buyers. For this purpose, Air New Zealand focuses on the morning and early evening time
to access large mass of passengers and offer them high quality food. However, this add high
cost to the business which might further reduce the profitability in the future time. In this context,
Amit & Zott (2012) asserted that company should make effective strategy to increase its trade-
off in the cost effective manner which help in increasing consumer base and profitability. Apart
from this, redesign of check-in process further added value to services and made it faster than
competitors.
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